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The Chamber blog is a great place to find out the latest news, see event photos, and get great business tips - send in your good news notices to admin@barriechamber.com for inclusion in our Positive Press for Members tag.

Member eNews Blog Post: Cash management tools can pay big dividends - Part 1 of 3

Monday, November 21, 2011

Cash is king, but far too many businesses don’t do as well a job of managing their cash as they could. It costs them more than it should to collect money and pay bills, not to mention the loss of interest that could have been earned on the money they have sitting in their business accounts, or the reduction in borrowing costs.

Cash management made simple
A lot of people believe that cash management is spooky and complicated. It isn’t. Fundamentally, it means keeping track of your cash and making it work for you. Having the right amount of cash, in the right place, at the right time. It boils down to three questions:

• How do I turn my receivables into cash as quickly and efficiently as possible?
• How do I keep that cash as long as I can?
• How can I earn as much interest as possible on that cash while I have it?

For smaller businesses, the right answers to those questions can make a difference to their profitability. For mid-size businesses, which can have several million dollars sitting in accounts at any one time, it can make a major contribution to the bottom line.

Meridian cash management solutions
It can come as a surprise that Meridian, Ontario’s largest credit union, offers cash management solutions for businesses. In fact, business people and farmers helped found this credit union 70 years ago because the financial services they needed were not available from other financial institutions.

Today, Meridian has more than 10,000 commercial Members from sole proprietorships to mid-size companies with $100-million or more in annual revenue. In addition to 63 branches, we have eight Commercial Business Centres, including one in Barrie. We offer a growing range of electronic cash management services and hands-on support in helping businesses identify how they can use these solutions to improve their bottom line.

Finding the right solution
Effective cash management can tell business people how much of the money in accounts is really theirs and for how long. It can identify suspicious or fraudulent transactions. It can save and make them money.

Think about this: every cheque you write or deposit costs you more than the 75 or 80 cents in bank charges associated with it. There are additional costs, far beyond the stamp and envelope that include costs of staff to reconcile cheques. A number of studies show that each cheque a business writes can cost between $5 and $120 depending upon internal procedures.

While there are costs for using cash management tools, these are almost always significantly less than costs to deposit or write a cheque. As well, moving to electronic cash management solutions lets you get your cash faster and keep it longer, while streamlining administrative processes and tightening controls.

Stay tuned for Part 2 where we’ll talk more about effective cash management solutions for your business.

If you’re looking for effective cash management solutions for your business, call Jason Teal, today at 705-792-0442 ext. 3315 or visit meridiancu.ca/barriebusiness




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